Canada’s federal banking regulator says it’s lowering its domestic stability buffer to three percent from 3.5 percent, a move it says will give the country’s six largest banks greater flexibility to deploy capital.
The Office of the Superintendent of Financial Institutions says it’s the first change to the domestic stability buffer since June 2023 and takes effect today.
The regulator also narrowed the potential range of the buffer to between zero and three percent compared with an earlier range of zero to four percent.
The buffer is part of the amount of money Canada’s big banks must keep on hand in case of economic shock. It applies to Canada’s six largest, or systemically important, banks. Lowering the buffer gives the banks more room to lend, potentially helping the economy….